A Green European Budget

However predictable the difficult negotiations that accompany European politics may seem to be, in the end they seldom fail to surprise. A crucial European Union summit aimed at securing a deal on the EU budget for 2014-2020, the so-called multi-annual financial framework (MFF), will take place later this week, and the mood music surrounding it has been intense, to say the least.

Before even a word has been spoken, Europeans are being told that the negotiations in Brussels will be “bad-tempered,” with vetoes by individual member states looming large. Unfortunately, such talk could well become a self-fulfilling prophecy.

Consider this: A group of major companies based in various EU countries – the likes of Tesco, Shell, Barilla, and Philips – are insisting that whatever its final size, the MFF deal should commit to a proposed minimum of 20% of spending in 2014-2020 on green and low-carbon growth. These are the same companies that Europe’s national governments court and listen to on a daily basis. But, when it comes to the MFF, Europe’s national leaders appear not to be listening closely. Nor do they say much about the obvious dividends that such spending could provide, from the United Kingdom in the west to the EU’s newest candidate country, Croatia, in the east.

Europe’s 500 million citizens may not be surprised by what is playing out in the corridors of power, but they ought to find it very disturbing. The issue is not only what could be lost in the race to the bottom in which many EU national governments are now engaging, but also the manipulative anti-EU sentiment coming from many quarters of the European press, which appears intent on pushing various national leaders into another budget showdown.

In the EU’s western, net-contributor states, the MFF debate remains narrowly focused on how much money can be cut from the European Commission’s proposed €1.033 trillion ($1.3 trillion) budget for 2014-2020. Next to nothing, though, is being said about the Commission’s more important, and more integral, proposal: the 20% spending commitment for projects and initiatives that can stimulate resource-efficient business, protect Europe’s collective, boundary-less environment, and ensure a better future for families across the continent.

The dividends promised by a “green” MFF (which recently received the support of the European Parliament) are at least threefold: a higher share of jobs in one of the world’s fastest-growing economic sectors; lower energy bills for households throughout Europe; and help in achieving the reductions in greenhouse-gas emissions to which all EU states have agreed as part of their “Europe 2020” commitments.

The green potential within EU spending has already taken root. In France, for example, social housing organizations have rapidly deployed €320 million of EU money in the last few years to improve energy efficiency in existing housing stock. This European finance triggered additional investment of €2.2 billion, created 15,000 local jobs, and has resulted in savings of €98 per month per household, thanks to a 40% average decrease in heating costs.

Recently, Michael Heseltine, a former minister in Margaret Thatcher’s government, stressed the importance of wind energy for deprived regions of the United Kingdom, such as the northeast of England. And yet the penny has not dropped in London that focusing European investment funds accordingly would create opportunities to build stronger businesses and increase competitiveness in the technologies of the future – and to share these gains within and beyond the EU. Instead, in the UK and elsewhere, the predictable MFF chest-thumping that is now underway threatens to dispatch this kind of opportunity to the bin beneath the negotiating table.

Europe has come a long way since 1951 and the creation of the European Coal and Steel Community, the forerunner of the EU. But we are now in the process of constructing the EU economy anew, striving to overcome the economic crisis, and creating a more sustainable, globally competitive, and resilient European economy – an economy that can be green as well as productive.

The EU’s heads of government need to understand the bigger picture as they prepare for this week’s MFF summit. Europe’s common good – indeed, its most promising path to a prosperous future – is at stake.

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Europe’s Dilemma: Austerity Revisited Or A New Path For Sustainable Growth

Although the Juncker Commission has included in its programme some new accents, such as Europe’s strategic investment plan, the Eurogroup’s negotiations with the new Greek government have made it clear that EU leaders remain reluctant to let go of their failing austerity narrative. Contrary to their claims that there is no alternative, several of the world’s top economists have developed alternative solutions to tackle Europe’s debt crisis.

At this special conference, renowned economists Prof. James Galbraith, University of Texas at Austin, Raymond Torres, Director of Research at the ILO, Heiner Flassbeck, former German State Secretary and Director of Flassbeck-Economics, and Prof. Benjamin Coriat, Université Paris 13, will provide their analysis of Europe’s protracted crisis and introduce concrete alternatives on how to reshape Europe’s economy for sustainable growth, investment, jobs and equitable prosperity.

Bernadette Ségol, ETUC General Secretary will give the closing remarks. The conference will be chaired by Philippe Pochet, ETUI General Director.

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As a result of the economic and financial crisis, many EU governments have reduced funding for healthcare services as one approach to balancing their budgets. Patients have been required to pay larger shares of their healthcare costs themselves, and availability of healthcare services has been reduced.

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Progressive Economy is holding a public conference on reconciling economic growth and social progress in the European Parliament on 4 March 2015. The conference will be an opportunity to exchange views on this crucial theme with Commissioner Moscovici, Luxembourg Minister Nicolas Schmit, S&D Members of the European Parliament, high-level academics and experts from Solidar, ILO and ETUC.

There will also be a presentation of the independent Annual Growth Survey 2015 by the authors from OFCE, IMK and ECLM.

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Contours Of A European Minimum Wage Policy

by Thorsten Schulten

Demands for a European Minimum Wage Policy, which fundamental aim is to guarantee every worker in Europe an equitable wage, differ. So far minimum wages in many European countries are set at rather low levels and are thus insufficient to prevent income poverty.

A possible European Minimum Wage Norm according to which all national minimum wages should at least be equivalent to 60 per cent of national median wages would affect about 28 million workers or 16 per cent of the overall European workforce. A European Minimum Wage Policy could also contribute to a better coordination of wages in Europe in order to stabilise domestic demand and to prevent deflationary developments.

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World Employment and Social Outlook: Trends 2015

The World Employment and Social Outlook: Trends 2015 includes a forecast of worsening global unemployment levels and explains the factors behind it, such as continuing inequality and falling wage shares. The report looks at the drivers of the rising middle class in the developing world as well as the risk of social unrest, especially in areas of elevated youth unemployment. It also addresses structural factors shaping the world of work, including an ageing population and shifts in the skills sought by employers.